The Ministry of Business, Innovation and Employment is due to report to the Commerce Minister by the middle of the year on its recommendations for a revised Financial Advisers Act.

It is expected that all financial advisers will be required to meet new competency and qualification standards – likely the New Zealand Certificate in Financial Services Level 5.

There are believed to be about 6500 registered advisers and tens of thousands within QFEs who could potentially have to qualify.

NZQA said since 2009, just 939 people had completed the National Certificate in Financial Services Level 5.

None had yet been recorded as having completed the new New Zealand Certificate, which replaced it.

The qualification is the core standard for authorised financial advisers, although there are alternatives such as graduate diplomas or university degrees.

NZQA could not give data on how many had enrolled and not finished the qualification.

But Barry Read, of compliance firm IDS, said the number was probably significant. “There were a number of registered financial advisers who prior to June 2010 had begun studies and then after the change from ‘financial planning service’ to ‘investment planning service’ [in the legislation] they stopped.”

He said the qualification was not difficult to complete because it was only a polytech-level certificate. But he said having a single certificate as a competency standard would not be the right way for the industry to go.

“I’d much rather see the industry bodies get together and come up with some competency standards that could be measured in other ways.”

That could mean workplace assessments, he said.

But David Greenslade, managing director of Strategi, said it would be a positive step for the industry.

“Some will struggle but they are likely to be people who have not undertaken formal education for a long time, those who are resistant to change. Even the new level five is like sucking eggs… they’ll go ‘I’ve been in the industry for 30 years, I know this’ and try to switch off and continue to regurgitate what they know from past experience. We’re seeing that now.”
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